News analysis
USA: price cuts and point of sale ads follow tax rise
| The first 150 words of the full text of this article appear below. |
A number of recent events have drawn attention to the likelihood that pricing and promotional strategies at the point of sale will become even more important to tobacco companies as a way of marketing their products in the United States and may well be used as a strategy to undermine the effects of state tobacco control programmes.
In the wake of the master settlement agreement, tobacco companies
announced a US$0.45 increase in November 1998 in the price of a pack of
cigarettes, a rise of nearly 20% on the average price of a premium
brand. Based on this rise, per capita tobacco consumption was predicted
to fall, but due to promotional discounting practices used by the
tobacco companies, it is unclear to what extent the price rise had an
effect. Within a few days, special discounts were announced that cut
the price of many leading brands by $0.45 per pack. In
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